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Beneish M-Score -0.76 higher than -2.22, which implies that it might have manipulated its financial results.
The zones of discrimination for M-Score is as such:
An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.
During the past 12 years, the highest Beneish M-Score of Pampa Energia SA was 1.27. The lowest was -5.67. And the median was -2.73.
The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.
The M-Score Variables:
The M-score of Pampa Energia SA for today is based on a combination of the following eight different indices:
|M||=||-4.84||+||0.92 * DSRI||+||0.528 * GMI||+||0.404 * AQI||+||0.892 * SGI||+||0.115 * DEPI|
|=||-4.84||+||0.92 * 1.1701||+||0.528 * 0.1927||+||0.404 * 1.2688||+||0.892 * 1.7881||+||0.115 * 3.5285|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.8503||+||4.679 * -0.0267||-||0.327 * 0.9755|
|This Year (Sep16) TTM:||Last Year (Sep15) TTM:|
|Accounts Receivable was $529 Mil.|
Revenue was 663.520807146 + 297.272980236 + 289.422760887 + 142.585103917 = $1,393 Mil.
Gross Profit was 114.754889637 + 7.13833528974 + 64.9019446727 + -6.46102140153 = $180 Mil.
Total Current Assets was $1,636 Mil.
Total Assets was $5,236 Mil.
Property, Plant and Equipment(Net PPE) was $2,571 Mil.
Depreciation, Depletion and Amortization(DDA) was $35 Mil.
Selling, General & Admin. Expense(SGA) was $335 Mil.
Total Current Liabilities was $2,028 Mil.
Long-Term Debt was $1,109 Mil.
Net Income was -62.484723549 + -47.8155872824 + 41.6049027664 + 159.298385228 = $91 Mil.
Non Operating Income was -5.22761325356 + -12.0770572822 + 27.655847713 + 115.890983543 = $126 Mil.
Cash Flow from Operations was 0 + 0 + 11.8792796494 + 92.0703855366 = $104 Mil.
|Accounts Receivable was $253 Mil.
Revenue was 202.068004637 + 192.255543939 + 190.257831899 + 194.362062917 = $779 Mil.
Gross Profit was 3.57806068728 + -0.509547130358 + 13.9011531004 + 2.46988656298 = $19 Mil.
Total Current Assets was $801 Mil.
Total Assets was $2,547 Mil.
Property, Plant and Equipment(Net PPE) was $1,352 Mil.
Depreciation, Depletion and Amortization(DDA) was $68 Mil.
Selling, General & Admin. Expense(SGA) was $220 Mil.
Total Current Liabilities was $1,018 Mil.
Long-Term Debt was $546 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(529.017245714 / 1392.80165219)||/||(252.850898184 / 778.943443392)|
2. GMI = Gross Margin Index
Measured as the ratio of gross margin in year t-1 to gross margin in year t.
Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(19.4395532203 / 778.943443392)||/||(180.334148198 / 1392.80165219)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (1636.04142994 + 2571.25868571) / 5235.6585047)||/||(1 - (800.522850792 + 1352.0490731) / 2546.82630846)|
4. SGI = Sales Growth Index
Ratio of sales in year t to sales in year t-1.
Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.
5. DEPI = Depreciation Index
Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.
DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.
|DEPI||=||(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1))||/||(Depreciation_t / (Depreciaton_t + PPE_t))|
|=||(67.837077666 / (67.837077666 + 1352.0490731))||/||(35.2935347563 / (35.2935347563 + 2571.25868571))|
6. SGAI = Sales, General and Administrative expenses Index
The ratio of SGA expenses in year t relative to year t-1.
SGA expenses index > 1 means that the company is becoming less efficient in generate sales.
|SGAI||=||(SGA_t / Sales_t)||/||(SGA_t-1 /Sales_t-1)|
|=||(335.206426505 / 1392.80165219)||/||(220.477513756 / 778.943443392)|
7. LVGI = Leverage Index
The ratio of total debt to total assets in year t relative to yeat t-1.
An LVGI > 1 indicates an increase$sgai= in leverage
|LVGI||=||((LTD_t + CurrentLiabilities_t) / TotalAssets_t)||/||((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)|
|=||((1109.42859537 + 2027.71924179) / 5235.6585047)||/||((546.112440573 + 1018.29169459) / 2546.82630846)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(90.6029771624 - 126.24216072||-||103.949665186)||/||5235.6585047|
An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.
Pampa Energia SA has a M-score of -1.74 signals that the company is likely to be a manipulator.
Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations
Pampa Energia SA Annual Data
Pampa Energia SA Quarterly Data